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Don't Get Caught by the New IRA Rollover Rules

1/1/2015 | By Team United

Financial Literacy

As of January 1, the IRS has changed its long-held interpretation of the 60-day IRA Rollover rule. For years, the IRS had taken the position that the rule that allows a 60-day, tax-free rollover every 12 months could be applied to each separate IRA. For 2015 and beyond, the IRS will now allow a taxpayer only one 60-day rollover per 12-month period, regardless of how many IRA’s you may have. According to Eric Freeman, the CFS Financial Advisor serving United Investment Planning in Fletcher and Statesville, NC, that doesn’t mean you can’t move the money, it just means the mechanics of how you move money from one IRA to another have become even more important to avoid unintended taxable distributions.

The issue, according to Freeman, is exactly who the check is made payable to. If the check is made payable to the account owner, it is considered a rollover and is subject to the new once-per-year interpretation. If however, the check is made payable to the new IRA custodian for the benefit of the account owner, it is considered a transfer and will not be limited by the “one-per-year” rule.

Fortunately, the CFS* Financial Advisors of United Investment Planning are well-versed on the mechanics of IRA Rollovers and Transfers. If you are considering moving any IRA or retirement money this year, please give them a call at (888) 982-1400 or stop by your local branch to arrange your complimentary consultation.

*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees of obligations of the credit union, and may involve investment risk, including the possible loss of principal. Investment Representatives are registered through CFS. United Federal Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union Members. Before deciding whether to retain assets in an employer sponsored plan or roll over to an IRA an investor should consider various factors including, but not limited to: investment options, fees and expenses, services, withdrawal penalties, protection from creditors and legal judgments, required minimum distributions and possession of employer stock. CUSO Financial Services, L.P. and its representatives do not provide tax advice. For such advice, please contact a tax professional.

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